CA45920 - Business Premises Renovation Allowance: Additional VAT

CAA01/Ss 360T, 360U, 360W, 360X and 360Y

A person who was entitled to initial allowance on a qualifying building may incur an additional VAT liability in respect of that building. If so the additional VAT liability qualifies for initial allowance. If the initial allowance is made after the premises are first used or available for letting the initial allowance is written off when the additional VAT liability accrues.

If the person who has the relevant interest in a qualifying building incurs an additional VAT liability it is treated as qualifying expenditure and added to the residue of qualifying expenditure.

The making of an additional VAT rebate to the person entitled to the relevant interest is a balancing event.

There is no balancing allowance.

There is a balancing charge if the additional VAT rebate is more than the residue or the residue is nil. The balancing charge is the difference between the additional VAT rebate and the residue or the additional VAT rebate if the residue is nil.

An amount equal to the additional VAT rebate is written off when it accrues.